The Handbook of Technical Analysis + Test Bank_ The Practitioner\'s Comprehensive Guide to Technical Analysis ( PDFDrive )

Moving Averages

be mathematically proven using basic algebra. Assume that the moving averages

have a lookback period of four bars and that closing prices are used.

First find the four-period SMA:

Average Price for Day 1=+++(C 4 C 3 C 2 C /4 1 )

figure 11.7 Calculations for a 10-Day Simple Moving Average of the CBOE Interest

Rate 10-Year Treasury Note.

Data: Yahoo Finance

figure  11.8 A 10-Day Simple Moving Average of the CBOE Interest Rate 10-Year

Treasury Note.

Data: Yahoo Finance